MA-03: On Tuesday, the House Ethics Committee announced that it was furthering its investigation of freshman Massachusetts Rep. Lori Trahan over loans totaling $300,000 that she made to her campaign last year ahead of her narrow victory in the Democratic primary.
The development came after a September report on matter from the Office of Congressional Ethics (OCE) was made public for the first time on Tuesday. That report concluded there was “substantial reason” to believe Trahan had “accepted personal loans and contributions that exceeded campaign contribution limits” and “failed to disclose required information in her congressional candidate financial disclosure reports or FEC candidate committee filings.” Investigators also noted that Trahan did not cooperate with their probe.
In March, a Trahan spokesperson sought to explain the problem by saying that the congresswoman had “enjoyed professional success that allowed her to support her own campaign.” However, the Boston Globe reported that Trahan’s own financial disclosures from the previous summer showed that she didn't have the resources to contribute anywhere close to $300,000 to her race. Trahan's husband, home builder David Trahan, is very wealthy, but his assets appear to be solely under his name, which would have prevented him from legally contributing more than the allowable maximum of $2,700 for the primary to his wife's campaign.
OCE investigators found that cash from David Trahan’s personal and business funds, however, was transferred to the couple’s joint checking account three times last year, and that Lori Trahan then loaned her campaign almost all of that money. The OCE concluded, “The process of transferring these funds from David Trahan’s accounts to a joint account did not transform these funds into Rep. Trahan’s assets, or even jointly owned assets,” meaning that David Trahan far exceeded the amount he was allowed to contribute.
The report goes on to say that not only the transfers but their timing was questionable. For instance, on March 31 of last year, which was the final day of the fundraising quarter, Lori Trahan wrote a $50,000 check to her campaign from the couple’s joint account, which her campaign recorded in its FEC report. However, the joint account had just $55 in it at the time. On April 7, David Trahan transferred $50,000 to the joint account; two days later, the campaign finally deposited the candidate’s check.
The same thing happened three months later on June 30 for $50,000 and again on Aug. 20, just weeks ahead of the primary, for $200,000. On the first two occasions, those transfers allowed Trahan to file reports with the FEC showing inflated fundraising totals, even though the money in question was not received until after the reporting period.
In late October of this year, after the OCE report was sent to the Ethics Committee but before it was released to the public, Lori Trahan published a post on Medium saying that her prenuptial agreement with her husband stipulated that the money they earned separately would belong equally to them, meaning that “[w]hat I earned was our money and what he earned was our money.”
The congresswoman went on to say that during last year’s campaign “we decided to move $300,000 from income Dave had earned to our joint checking account; Dave deposited $50,000 and $55,000 into our joint checking account before I filed my first and second quarterly reports in 2018, and in August, he deposited an additional $200,000.” Trahan continued, “I loaned money to my campaign in similar amounts from that joint checking account—$50,000 on March 31st, $50,000 on June 30th, and $200,000 on August 22nd. Later in the campaign, I used a home equity line of credit to loan my campaign an additional $71,000.”
Trahan further said, “I now know that the way I contributed those funds constitute a gray area in campaign finance law” and claimed there were “inadvertent omissions and errors in my initial filings.” However, Trahan argued that prior FEC rulings “suggest what I did was not a violation.” After providing several examples, she wrote that “perhaps most tellingly, several commissioners on the Federal Election Commission looked at the question of how to determine when funds belonged to one family member versus another family member, and described it all as ‘hopelessly muddled.’”
Trahan was already facing the prospect of a September primary rematch with Andover Selectman Dan Koh, whom she beat by 145 votes last year. Koh hasn’t said when he expects to decide, but he said Tuesday, “The voters of the Third District deserve a full, honest account of her conduct during the election and the consulting clients she claims funded her campaign.” Massachusetts’ 3rd District, which includes the Lowell area and the Merrimack Valley, backed Hillary Clinton 58-35.